The voice of reason for AEC firms & management consultants

Conference call: Brian Sullivan

CEO of Sullivan Engineering (Hot Firm #89 for 2017), a 20-person building envelope consulting firm based in New York, New York.

By Liisa Andreassen
Correspondent

“We strongly reward autonomy and encourage each other to make our supervisors feel useless,” says Sullivan, referring to the role of entrepreneurship in his firm.

A conversation with Brian Sullivan.

The Zweig Letter: The talent war in the A/E industry is here. What steps do you take to create the leadership pipeline needed to retain your top people and not lose them to other firms?

Brian Sullivan: We are proactive in sharing the company vision for the next 10 years and beyond. We identify opportunities that will become available and try to assist all of our team members to identify the specific aspects of their role that they love and are great at doing. With our top people, we’re regularly providing the opportunity to work on other aspects of the business that may not be part of their current role now, but could lead to a future leadership role. We continually try to build a strong team by hosting social events after work, regularly sharing personal and professional victories before each weekly team meeting and making sure that our team knows that we are here to assist each other in developing as individuals, not just professionals

TZL: As you look for talent, what position do you most need to fill in the coming year and why?

BS: In addition to adding more technical team members, we’ll likely add more administrative support to allow more of our engineers and architects to focus on their strengths and delegate their weaknesses.

TZL: While plenty of firms have an ownership transition plan in place, many do not. What’s your advice for firms that have not taken steps to identify and empower the next generation of owners?

BS: There is a strong sense of security that comes from knowing a transition plan exists. A/E firms with a sole ownership structure could be susceptible to large risk should anything happen to the owner. While it may not be discussed openly, many team members likely consider this an issue – lack of a plan in place leads to uncertainty throughout the team. From the start, we established and regularly discuss a transition plan.

BS: The type of team members who we recruit are those driven by more than just compensation. They want to genuinely enjoy being on our team; they want to connect on non-professional levels; and they want to serve a greater purpose than just the day-to-day tasks of incremental growth. If they connect with their fellow team members, are in sync with the core values of the firm, and believe in the vision, they will do everything in their power to ensure success.

TZL: Zweig Group research shows there has been a shift in business development strategies. More and more, technical staff, not marketing staff, are responsible for BD. What’s the BD formula in your firm?

BS: We recently hired a non-technical business development associate. Prior to that it was all handled by the technical team. As a result, we didn’t have a consistent backlog of work. We fell into the trap of being more aggressive in BD as workloads began to slow down and less aggressive when we were busy with active projects. Our new BD associate, although never having worked in the AEC industry, has come up to speed much faster than we had envisioned and is doing a great job opening doors, generating proposals, and establishing processes to ensure a steadier backlog. This also allows our technical staff to focus more on providing a better experience for our clients which leads to more recurring work.

TZL: Diversifying the portfolio is never a bad thing. What are the most recent steps you’ve taken to broaden your revenue streams?

BS: We are committed to remaining in our core focus of exterior restoration services; however, over the past two years we’ve made a concentrated effort to expand into the commercial as well as institutional/educational sectors. Throughout 2018, we’ll likely add complementary areas of practice to support our core focus, like non-destructive testing and structural engineering support services.

TZL: The list of responsibilities for project managers is seemingly endless. How do you keep your PMs from burning out? And if they crash, how do you get them back out on the road, so to speak?

BS: We try to emphasize the relative short duration of spikes that result from the somewhat seasonal nature of our business. We discuss the rewards that come at the end of the spike like our Christmas shutdown and Winter Fridays. We remind each other to intentionally plan additional time with our loved ones, especially during the slower season. At the start of our weekly team meetings – to help keep a positive mindset – we identify one personal best and one professional best that occurred for each individual. We also encourage team members to use all of their vacation and personal days to recharge.

TZL: What is the role of entrepreneurship in your firm?

BS: An entrepreneurial mindset is a very strong focus within our team. We recently started monthly mini-assignments for all team members that help develop/foster an entrepreneurial way of thinking. We strongly reward autonomy and encourage each other to make our supervisors feel useless. At the end of 2015, we began incorporating the Entrepreneurial Operating System into our business and have seen tremendous success from the results in how we lead, the processes we have in place and the ability to analyze and assess goals and results.

TZL: In the next couple of years, what A/E segments will heat up, and which ones will cool down?

BS: We anticipate an increased focus on renovations and adaptive reuse that provide more affordable/sustainable housing.

TZL: With overhead rates declining over the last five years and utilization rates slowly climbing back up to pre-recession levels, how do you deal with time management policies for your project teams? Is it different for different clients?

BS: We track individual and team utilization rates and discuss them weekly. We recognize that goals are often not missed because of lack of effort, but more commonly due to an increase in non-billable assignments that are focused on improving our processes.

TZL: Measuring the effectiveness of marketing is difficult to do using hard metrics for ROI. How do you evaluate the success/failure of your firm’s marketing efforts when results could take months, or even years, to materialize? Do you track any metrics to guide your marketing plan?

BS: To date, our marketing ROI has been evaluated by gut-feel which translates to increasing spending when cash flow is good and decreasing it when cash flow is tight. Obviously, that’s not a great strategy, so we’ve begun using a CRM software and are establishing thorough budgets with a monthly review process to gain a much better understanding of what’s working and what’s not working.

TZL: The last few years have been good for the A/E industry. Is there a downturn in the forecast, and if so, when and to what severity?

BS: With cautious optimism, I don’t see one on the horizon within the next two years.

TZL: They say failure is a great teacher. What’s the biggest lesson you’ve had to learn the hard way?

BS: Our biggest lessons have been in hiring: should’ve hired sooner and in a few instances should’ve taken more time to evaluate candidates in the interview process. Additionally, delegating has been an issue; more specifically recognizing that just because I don’t like doing certain tasks doesn’t mean that other people on our team also don’t like doing them.

TZL: While M&A is always an option, there’s something to be said about organic growth. What are your thoughts on why and how to grow a firm?

BS: So far all of our growth has been organic. It seems easier to control company culture, quality of work, and the core values. However, we recognize the benefits of acquisitions, particularly as we consider opening offices in other cities as well as adding complementary practice areas.

TZL: Do you use historical performance data or metrics to establish project billable hours and how does the type of contract play into determining the project budget?

BS: To date we’ve used historical data; but are now incorporating metrics.

TZL: What’s your prediction for 2018?

BS: Continued growth for the A/E industry and for Sullivan Engineering (Hot Firm List again!). M&A activity will likely continue as large firms continue to compete with ever-growing competition. As for the smaller firms, acquisitions will continue while baby boomers who are sole owners approach retirement.

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